Social media competitions: Top five legal tricks and traps – StartupSmart

The rapid growth of social media has allowed businesses to engage with their customers in an increasingly personal manner.

 

However, it is easy to get lost amongst the crowd of other businesses fighting for potential customers’ attention. One way to stand out is the promotion of competitions through social media pages such as Facebook, Twitter, Pinterest and YouTube.

 

However, although this option may seem like an easy way to interact with existing and potential customers and promote your products or services, there are many legal requirements to consider before embarking on a social media competition campaign. Here is my top five:

 

1. Social media platform rules

 

Each social media site has a unique set of terms and conditions that you must comply with in order to run competitions from their sites. For example, Pinterest does not allow ‘liking’ or ‘following’ to represent an entry into a competition whereas Facebook does, so it is important that you familiarise yourself with the terms and conditions of the site before running any competition.

 

2. Misleading and deceptive conduct

 

Under the Australian Consumer Law competitions run on social media, like all other aspects of businesses that interact with the public, must not be misleading or deceptive. This requires you to make sure competition rules are easily accessible and clear.

 

Also, you should be careful when paraphrasing any rules or using slang or abbreviations (for example, due to character restrictions) as this could be considered misleading or deceptive.

 

It is also important to ensure that no misleading or deceptive content is posted on your social media page by third parties or that any such content is removed as soon as possible after it is posted. For example, if you ran a competition that required entrants to post on your page why they loved your product and an entrant had posted that it was because your product worked so much better than brand X, if that was not true and you did not remove the comment from your page, you could be held responsible for the entrant’s comment. It is therefore important to have someone monitor your social media page to ensure any potentially misleading or deceptive comments/posts are removed as soon as possible.

 

The ACCC has indicated that the appropriate amount of time a business should spend monitoring its social media pages will depend upon the size of the business and the number of fans or followers it has on the relevant social media.

 

3. Australian and international laws governing competitions

 

Each Australian state and territory has its own laws governing competitions that involve an element of chance. That is, competitions that are not entirely based on skill or require no skill whatsoever.

 

Where you decide to run a competition involving chance, it will need to comply with any state or territory laws where the competition is held. This means that even if you are located in Victoria, if your competition allows entrants from across Australia, you will need to comply with all of the relevant state and territory laws. Many of these laws are similar but not identical.

 

Complying with the laws may also include getting required permits in each state and territory. For example, a permit in Victoria is needed for any competition involving chance where the prize is valued above $5000. Time-frames for getting these permits must also be taken into consideration.

 

For example, the Victorian Commission for Gambling and Liquor Regulation recommends submitting an application for a permit 28 days prior to the commencement of the trade promotion lottery.

 

All jurisdictions have restrictions on the types of prizes that may be awarded, such as liquor prizes limited to persons over 18 years of age, and therefore you may need to put in place systems to check entrant’s eligibility.

 

There may also be requirements for notifying or publishing details of winners that go beyond simply contacting and publishing details of the winners through social media. For example, in South Australia for certain trade promotion lotteries with prize values below $5000, a list of the drawn prizes and their winners must be displayed in a prominent place in the premises at which the lottery was drawn for at least seven days after the date it was drawn.

 

Where your competition is international, not only do you have to comply with Australian laws, you must also ensure compliance with any local laws of the countries that your competition is open to.

 

4. Advertising standards

 

The Advertising Standards Board is an industry body that monitors advertising according to various codes of practice. Compliance with the codes is voluntary and any determinations made by the Board about code breaches are not binding, however non-compliance may reflect poorly on your business. As information distributed through social media platforms constitutes advertisements, when creating any competition through social media, these codes should be considered.

 

5. Spam

 

If you intend to put the entrant’s details on your mailing list, you should be aware that the Spam Act generally requires a person’s specific consent to receiving marketing or promotional messages. Having simply entered your competition alone may not be enough.

 

In summary, before embarking on creating a competition through a social media platform you should be aware that there is a range of legal requirements to consider to avoid legal troubles with your competition.